That will be followed within 30 days by establishment of a plan for the authority to repay $465,000 in retirement costs that the city paid in December to cover unpaid bills dating back to 2008, Morse said.

Alex Morse

Some city councilors said they were skeptical, but Morse said the steps show progress in the years-long effort to resolve the burden authority financial problems have put on taxpayers.

“I made a promise to the city’s taxpayers that I would work hard to resolve issues related to the Geriatric Authority. This is by far a great first step for the city and its taxpayers,” Morse said.

Morse and Patricia C. Devine, chairwoman of the authority board of directors, praised the work on the issue done by City Solicitor Elizabeth Rodriguez-Ross.

State law requires that entities such as the authority and the city make contributions according to a schedule to ensure retired employees’ pensions get funded.

The authority has stayed current on pension payments made from employee payroll deductions, but struggled with its own pension contributions, and other bills.

The authority is an 80-bed nursing home with another 80 daycare slots for elderly people at 45 Lower Westfield Road.

The facility is overseen by a board consisting of three appointed by the City Council and three appointed by the mayor, with those six choosing a seventh.

Authority officials have said financial problems are because federal reimbursements cover only 75 percent of costs. But councilors and others say management also bears some blame.

The $89,000 is part of $150,000 the authority has received from the Massachusetts Division of Health Care Finance and Policy under the Certified Public Expenditure Regulation. The mayor had to agree to release the money, and Morse said he signed the release only because authority officials agreed to pay the current retirement costs and enter a payment plan.

“I am confident that the agreement signed today marks a new era of fiscal responsibility at the Holyoke Geriatric Authority, and I thank the board of directors and the (authority) management for their cooperation. This type of action is long overdue,” Morse said.

But Ward 7 Councilor Gordon P. Alexander questioned how, short of getting additional government funding, a payment plan can succeed if the authority is strapped for cash.

“From what I’ve seen, there’s nothing to indicate they have a plan to increase revenue and from what I’ve seen, there’s nothing to indicate they have a plan to cut expenses,” Alexander said.

Todd A. McGee, council Finance Committee chairman, filed an order asking that the state audit the authority’s finances.

The audit was supported by Devine, a former city councilor who became board chairwoman April 25.

Devine said her understanding was authority Executive Director Sheryl Y. Quinn will seek more grants to try to repay the city.

“As a board we are committed to continue to work with the city to forge ahead with a repayment plan, more communication with the City Council and mayor’s office and most importantly to bring reassurances to the residents and employees that we are working hard for them,” Devine said.